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Understanding Decision Bias

CO2

Decision bias speaks to the ways we’re prejudiced or unduly influenced (consciously or unconsciously) when making decisions. Fallacies often appear to be correct but are not. That’s why they can be difficult to detect–in others’ arguments and even our own. CEOs are not immune to bias. None of us are.

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Decision Bias

CO2

Decision bias speaks to the ways we’re prejudiced or unduly influenced (consciously or unconsciously) when making decisions. First, Arnott reviewed some of the most prominent taxonomies: Tversky and Kahneman (1974) Three General Purpose Heuristics. Isenberg (1984), How Senior Managers Think. CEOs are not immune to bias.

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Decision Bias

CO2

Decision bias speaks to the ways we’re prejudiced or unduly influenced (consciously or unconsciously) when making decisions. First, Arnott reviewed some of the most prominent taxonomies: Tversky and Kahneman (1974) Three General Purpose Heuristics. Isenberg (1984), How Senior Managers Think. CEOs are not immune to bias.

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Why Companies Are Betting Against Big Ideas

Harvard Business Review

This idea of prospect theory, developed by Tversky and Kahneman and reported in a classic 1979 article (for which the Nobel prize was awarded) demonstrated that individuals do not make decisions rationally by selecting options with the highest expected value, because they are risk-averse and 'losses loom larger than gains.'.

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Why Those Guys Won the Economics Nobels

Harvard Business Review

Others, most notably money managers and former Fama students Cliff Asness and John Liew in an epic Institutional Investor article , have done a lot recent to clarify how Fama’s ideas and Shiller’s can at least co-exist peacefully. It feels like it’s got a little bit of Kahneman and Tversky in it. Absolutely.

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